Impact of Pricing Decisions on Sales Performance: M&S Case Study

This report analyzes the impact of pricing decisions on the sales performance of Marks and Spencer (M&S). The study investigates various pricing strategies, including economic, penetration, and psychological pricing, and their effects on customer behavior. It explores the effectiveness of low prices in attracting customers and influencing their purchase decisions. The research employs a descriptive design, utilizing both secondary data from literature reviews and primary data collected through questionnaires. The report presents findings from customer surveys, revealing that price is a significant factor in purchase decisions, and that low prices and discount offers are particularly effective in driving sales. The analysis includes a Gantt chart outlining the research activities and a thematic analysis of the survey responses. The report concludes with recommendations for M&S to enhance its sales performance through strategic pricing and promotional activities, emphasizing the importance of balancing price with brand image and product quality to maximize customer satisfaction and sales.

Research for Senior
Managers

TABLE OF CONTENTS
TASK 1............................................................................................................................................1
TITLE:.............................................................................................................................................1
1. Background of the study.........................................................................................................1
2. Rationale of the study..............................................................................................................1
TASK 2............................................................................................................................................2
1. Critical Review........................................................................................................................2
2. Research methods....................................................................................................................3
3. Gantt chart...............................................................................................................................3
TASK 3............................................................................................................................................4
1. Title.........................................................................................................................................4
2. Literature Review....................................................................................................................4
6. Research Methodology............................................................................................................6
4. Questionnaire..........................................................................................................................7
5. Record and Collection.............................................................................................................9
6. Interpretation and analysis....................................................................................................10
7. ...............................................................................................................................................13
7. Recommendations and conclusion........................................................................................13
REFERENCES..............................................................................................................................14

TASK 1
TITLE:
To identify the impact of pricing decision on sales performance of company- A case
study on Marks and Spencer
1. Background of the study
A good marketing and pricing strategy aids the organization to attain maximum
profitability. It is the key to the success of each and every company through which the sales
operations can be enhanced as well as help in gaining worldwide popularity. However, the
present research is conducted in similar context so as to identify the range of activities or
strategies through which operations of company can be managed and enhanced in the most
effective manner. For this purpose, several pricing tactics will be identified by the scholar which
aids respective organization to deal with the diverse circumstances as well as compete against
other rivalry firms.
2. Rationale of the study
Main aim of current research is to identify the effectiveness or impact of pricing
operations of the firm. The current study aids in ascertaining specific area of marketing concept.
Several other researchers have conducted a study on the respective topic, however, they fail to
identify the impact of pricing practices of company. Therefore, scholar has selected the present
topic to fulfil limitations of researches as well as make effective judgements or recommendations
to enhance the sales performance of company. Furthermore, marketing is a vast concept which
provides readers with an insight on diverse aspects of sales and promotion. Additionally, it
creates a wide scope for the investigator to conduct research in an appropriate manner as well as
to identify the relevant areas which can be highlighted as well. Therefore, researcher has selected
the present topic based on his personal interest. This will further help in ascertaining complete
relevant information so as to conduct the report in an appropriate manner by presenting all facts
and figures. Moreover, the investigator has personal interest on respective topic which will
further help in achieving the desired results.
Aim: To identify the impact of pricing decision on sales performance of company- A case
study on Marks and Spencer

Objectives:
 To assess different kinds of pricing strategies used by the clothing industry
 To determine effectiveness of low prices on the demand of products To recommend the ways in which sales performance of M&S can be enhanced
Research Questions
 What are the different kinds of pricing strategies selected by clothing industry?
 How does the low prices influence demand of products?
 What are the ways in which sales performance of M&S can be enhanced?
TASK 2
1. Critical Review
Kinds of pricing strategies
As per the opinion of Gilmore and et.al., (2013), there are different kinds of pricing
strategies adopted by company according to current situation prevailing in the market as well as
action plans adopted by customers. However, it has been ascertained that some of the pricing
strategies adopted by firms include economic, penetration and psychological. These are however
decided after completing analysis of customer’s behaviour towards prices and the external
environment which may affect their buying pattern.
Effectiveness of low prices
As per the view points of Wang and et.al., (2016), people get highly influenced by the
alterations in pricing strategies of company. It aids in determining or ascertaining the sales of
enterprise based on customer behaviour and buying pattern. In addition to it, Kireyev, Kumar
and Ofek, (2014) supports by stating that higher the prices of products and services will be;
lesser would be the demand of its goods and services and vice versa.
Methods to improve sales performance
Xie and et.al., (2016) critically states that pricing is not the only strategy through which
performance of company can be enhanced. Nonetheless, there are varied techniques and ways in
which it can enhance its operations. Some of the most prominent methods suggested by Guo and
et.al., (2013) includes promotion, personal selling, improving the customer relationship,
2

providing ancillary services, etc. However, pricing is also the most prominent method through
which sales performance of respective company can be improved.
2. Research methods
In order to conduct the above research, the following methods will be selected by scholar
so as to conduct the study in an appropriate manner. Research approach: Since it is a qualitative study, investigator will be using an inductive
approach as it is the most suitable for present study of pricing strategies. This helps
researcher to observe the behaviour of customers and draw patterns based on the
hypothesis which further leads to defining theory (Silverman, 2016). Research design: Since scholar will be going to describe the areas which have not been
identified in the past studies, therefore, descriptive design shall be used. Although, there
are varied kinds of research designs which can be used by the investigator, it includes
exploratory, experimental and casual. However, in the present study, it is describing a
fact that is impact of pricing decision on the sales performance of company. Therefore,
the descriptive style will be used. Data collection method: In order to conduct the literature review in an appropriate
manner and highlight the relevant information regarding pricing decisions and its
methods, secondary method of data collection will be selected by the researcher.
However, primary data will also be used in the current study therefore, questionnaire will
be prepared to gain the reviews of customers (Merriam and Tisdell, 2015).
 Data Analysis: Since it is a qualitative study, therefore, thematic analysis will be done by
the scholar wherein themes shall be prepared based on objectives and questions that has
been asked by the investigator to customers.
3. Gantt chart
In order to conduct the research study, following activities will be conducted in the
respective manner:
Activities 1 2 3 4 5 6 7 8 9 10 11 12
Designing research proposal
Making critical review
3

Preparation of aim and
objectives
Accumulation of secondary
information
Evaluating secondary data
Drafting literature review
Selection of research
methods
Preparing questionnaire
Conducting surveys
Evaluating results
Preparing themes
Making recommendations
Printing and binding
Submission
TASK 3
1. Title
Aims: To identify the impact of pricing decision on the sales performance of the
company- A case study on Marks and Spencer.
Objectives:
 To assess different kinds of pricing strategies used by the clothing industry
 To determine the effectiveness of low prices on the demand of products
 To recommend ways in which sales performance of M&S can be enhanced
2. Literature Review
Different kinds of pricing strategies
In the view point of Guijarro and et.al., (2016), there are different kinds of pricing
strategy that is adopted by different companies. The choice lies in the hands of the marketers
4

based on its current strategies and market demand. However, some of the most common kinds of
pricing strategy adopted by the apparel industry includes penetration pricing. It is used in order
to attract customers with low preference price. Nonetheless, when a new firm enters into a
developed market, it uses the respective strategy so as to gain wider consumers thereby
enhancing it market share.
In contrast to it, Wu, (2013) states that economy pricing is used by the companies in
those cases when it wants to strike price conscious consumers that can render high amount of
sales volume. Furthermore, this strategy is not useful for the small enterprises as they have a
small amount of sales volume which may further increase their cost of product thereby leading
them to debt situation. Apart from this there are numerous kinds of pricing strategy which can be
used by the senior manager in order to the achieve the sales target of the period which includes
bundle, skimming, psychology, etc. Moreover, as per the opinion of the Herrmann and et.al.,
(2015) when a new clothing material is launched or brought up in the market then the companies
intent to set the prices high as the new features and ancillary services or advantages provided by
the product is much higher which caused an increased demand of the services. In addition to it,
all these give rise to organizations making higher sales and profit in the respective period and
thereby lowering its rates later on when the demand get reduced.
Effectiveness of low prices on demand
In the view point of the Safdarian, Fotuhi-Firuzabad and Lehtonen, (2014), people are
highly price conscious in the present world which caused them to select diverse options or
substitutes products that are available to them at low prices. Since demand and price are two
determinants which are highly influenced by each other. Several studies has demonstrated that
the their is a direct relationship between the price and demand of the product. When the rates of
the goods are reduced by the companies then it is likely to influence or increase its demand.
Furthermore, vice versa is experienced when the products are expensive in nature, the customer
switch to other brands or substitutes products which is offered by the other rivalry firms. Gilmore
and et.al., (2013) denotes that, in order to raise the sales performance of the organization, the
marketers chooses to reduce the prices of the products and services so as to attract new
customers and enhance its operations.
Methods to increase sales performance
5

Sales of the company is the most crucial component which decides its profitability as
well as its current position in the market. Therefore, the marketers are engaged in devising new
strategies and plans that aids in improvising its current performance thereby enhancing its sales
for the period. In the view point of the Wang and et.al., (2016) it depicts that there are varied
methods to enhance the sales of the company which includes branding, promotion, customer
satisfaction, etc. There are varied customers that are brand conscious and chooses to wear
branded clothes. Therefore, sales of a company can easily be raised by the means of selecting
appropriate branding decision and devising marketing strategies for the target group. Apart from
this, promotion and special offers are also an appropriate method through which the target
customers can be attracted by the companies and based on this sales can be enhanced.
Furthermore, discounts, buy one get one free aids in gaining customer loyalty as well as
increases the sales operations of the firm. Therefore, all the above demonstrated methods aids in
the organization to enhance its sales (Ingram, 2017).
6. Research Methodology
There are numerous methods and ways to collect the data and use them in the most
profound manner so as to make the study authentic and appropriate in manner. The scholar has
selected the following methods and techniques in order to conduct the above report
appropriately. Research approach: There are two kinds of research approach which can be used by the
scholar. It includes inductive and deductive approach wherein the former one has been
used by the investigator to conduct the study (Merriam and Tisdell, 2015). The reason
behind selecting the respective method is that, since the present study is based on
qualitative analysis. Therefore, data will be collected by the investigator on the basis of
observation on customers buying behaviour. Thereafter, the concepts will be formed
which can further take the form of theories. Research design: There are many kinds of research design which encompasses of
exploratory, experimental, causal and descriptive. Since the present study describes the
importance or impact of pricing decision on the sales performance of Marks and Spencer.
Therefore, descriptive analysis has been selected wherein each concept has been
described clearly to approach at relevant theories.
6

 Data Collection methods: For the current study both the primary and secondary data has
been selected by the researcher which will aid in accumulating relevant information for
the successful accomplishment of results (Cohen and et.al., 2014). Moreover, primary
data has been collected by the customers in form of questionnaire. For this purpose a
sample of 50 customers has been taken by selecting the stratified sampling method.
Moreover, in order to conduct literature review in an appropriate manner, books, journals,
articles, newspapers has been refereed by the scholar as a secondary source. Research philosophy: There is no perfect definition to the research philosophy.
However, there are types of philosophy that can be used by the scholar including
interpritivism and positivism (Haines and et.al., 2014). As the word suggest that
interprivitism is used for the purpose of interpreting any concept. Contradictory to it,
positivism is used in order to identify real facts. However, scholar has selected positivism
philosophy to identify the reality behind the effects of pricing decision on the sales
performance of the company. Data analysis: Since the present report is base don qualitative analysis of facts and figure
therefore, themes has been prepared by the scholar to analysis the responds presented by
the scholar based on which recommendations has been made and theories has been
presented.
 Sampling: For the present research scholar has stratified sampling wherein every nth
number of customer shall be selected in order to conduct the survey and derive relevant
information so as to the prepare themes on the same. Moreover, it is more useful than the
other methods of collecting sampling such as random and cluster as proper preference is
being given to each participants rather than selecting the respondents on random basis.
Moreover, it removes the biased attitude of the scholar and aids in presenting as well as
conducting the research in an accurate and desirable manner (Mackey and Gass, 2015).
4. Questionnaire
Questionnaire
Personal information
Name: __________________
Age: _______
Occupation:
7

 Business person
 Professional
 Service class
 Unemployed
Gender
 Male
 Female
Q 1) What do you first consider while purchasing a particular product?
 Price
 Brand
 Quality
 Customer services
 All of the above
 None of the above
Q 2) Do low prices is likely to attract you to make a purchase?
 Yes
 No
 Maybe
Q 3) Are you satisfied with the current pricing strategy proposed by the Marks and Spencer?
 Highly satisfied
 Satisfied
 Neutral
 Dissatisfied
 Highly dissatisfied
Q 4) What makes you revisit the retail store of Marks and Spencer over and again?
 Low priced products
 High brand image
 Quality products offered
 All of the above
 None of the above
Q 5) What in your opinion is more likely to intensifies the customers to purchase?
8

 Promotional schemes
 Economic pricing
 Discount offers
 Special offers
 All of the above
 None of the above
5. Record and Collection
Q 1) What do you first consider while purchasing a particular product?
Price 25
Brand 5
Quality 8
Customer services 2
All of the above 9
None of the above 1
Q 2) Do low prices is likely to attract you to make a purchase?
Yes 38
No 5
Maybe 7
Q 3) Are you satisfied with the current pricing strategy proposed by the Marks and Spencer?
Highly satisfied 12
Satisfied 16
Neutral 12
Dissatisfie
d 4
9

Highly dissatisfied 6
Q 4) What makes you revisit the retail store of Marks and Spencer over and again?
Low priced products 15
High brand image 5
Quality products offered 6
All of the above 24
None of the above 0
Q 5) What in your opinion is more likely to intensifies the customers to purchase?
Promotional schemes 1
Economic pricing 12
Discount offers 26
Special offers 6
All of the above 3
None of the above 2
6. Interpretation and analysis
Price is the most effluent factor contributing purchase decision of customers
When customers were asked about the factors that influences their purchase decision
then, 25 out of 50 said price is the most important factor that affects their purchase decision
which is almost 50% of the people agreeing with the same. However, other variables were also
provided to them such as quality, brand, customer satisfaction but most of them choose price.
Therefore, it can be stated that price has a high influence over the sales operation of Marks and
Spencer.
10